Summer 2000 (8.2)
Pages 90-95

BP Amoco Section
BP Amoco Current Developments

by Tamam Bayatly

SDX-2 Results
BP Amoco, on behalf of Shah Daniz participants BP Amoco (operator, 25.5%), Statoil (25.5%), SOCAR (10%), Elf (10%), LukAgip (10%), OIEC (10%) and TPAO (9%), announced in April the successful completion of the testing phase of the SDX-2 appraisal well. The well was drilled to a total depth of 5,892 meters, 6 km to the south of SDX-1, the original discovery in July 1999. An extensive testing program was carried out on two layers, and all of the objectives were met in each test.

Left: Gordon Birrell, BP Amoco Azerbaijan Exploration Business Unit Leader.

In the first test, the reservoir interval known as Fasila Suite was tested. The interval that was tested flowed at up to 63 mmscf/d (1.8 MCM/d) through a 48/64" Choke (19 mm) with a wellhead pressure of 6,140 psia (425 bar). Associated with this gas flowrate was a flow of 3,250 bpd of condensate (420 tons). If turned into a producing well, it would undoubtedly be able to deliver at a significantly higher rate.

When this first test was completed, that zone was isolated and a second test carried out of the Balakhany VIII interval. This zone was produced at a similar maximum rate of 60 mmscf/d (1.7 MCM/d) through a 52/64" Choke (20.5 mm) with a wellhead pressure of 4,800 psia (330 bar). Associated with this gas flowrate was 3,100 bpd of condensate (390 tons). As with Fasila Suite, if this zone were to be used as a producing well with all the necessary facilities, a significantly higher flowrate could be achieved.

Above: Academician, scientist and director of Azerbaijan's Oil Academy Azad Mirzajanzade presenting educational materials related to oil and the environment that BP Amoco had published. The ceremony took place at the "School for Young Scientists" which operates within the BP Amoco-founded OIl and Gas Exploration and Production Advanced Technology Center in Azerbaijan's Oil Academy.


The well was also shut in after flowing each test and the rate of pressure build up in the reservoir analyzed. This has given extremely encouraging data about the reservoir performance of Fasila Suite and Balakhany VIII. Samples of the hydrocarbons were also taken during testing, and these are being analyzed to help in the understanding of the reservoir performance and also in the design of facilities for development of the field. Further analysis of the data obtained during these tests is being conducted and will be used for planning of the development of the field.

Gordon Birrell, BP Amoco's Azerbaijan Exploration Business Unit Leader, said: "The tests have been very successful and have achieved the objectives, enabling us to confirm our plans outlined back in February for the potential export of Azerbaijan gas to Turkey from the Shah Daniz field in the Caspian Sea.

"The Shah Daniz partners are encouraged by the results of the first two wells. SDX-2 has added significantly to the partners' confidence, enabling them to embark on the first stage of a program for field and midstream development. The Shah Daniz Group are now in a position to be responsive to the market's demands, as Shah Daniz provides a realistic Caspian resource to deliver early volumes of gas to the market."

Rashid Javanshir, President of the Shah Daniz PSA, said: "A third well (SDX-3) will be drilled later this year to further delineate the field, with possibly three more appraisal wells to follow, and the potential for further upgrading of reserves. The field lies in water depths between 50 meters and 600 meters, some 70 kilometers southeast of Baku."

Safety is Highest Priority
The company has achieved a record safety performance with zero LTI (Lost Time Incident) for more than 2.5 million man-hours worked. Continuously improving safety performance in all operations remains the highest priority.

Production
Since the beginning of 2000, BP Amoco has had outstanding production results from the Chirag platform, with 110,000 barrels of oil daily during the first quarter. The average production rate target for this year is planned to be 100,000 bpd. The total production from Chirag since the beginning of the year has been 2 million tons (15 million barrels), for a total of 16 tankerloads from Supsa (including 2 tankerloads of Azerbaijan's profit oil). In addition, BP Amoco has lifted four tankerloads of Azerbaijan oil from Novorossiysk this year.

Left: The wonders of Earth Day. BP Amoco sponsored educational projects to make youth more aware of their own responsibility in taking care of the environment.

GCA 6/6Z Appraisal Well
Good drilling performance continues in GCA 6/6z appraisal well in the Azeri field. The well, which is designed to appraise the far eastern part of the field, is being drilled by the semi-submersible rig Dada Gorgud. BP Amoco spudded the main hole in the well on March 24 and currently is coring reservoir section at 3,400m. The company anticipates that it will be able to conduct testing in the well in early June. The well has a designed total measured depth of 3,540m; however, it features a planned sidetrack that will reach a measured depth of 3,840m.

Chirag Water Injection
The offshore lifting and installation of the 250-ton Water Injection module and 50-ton deaerator on the Chirag-1 platform has been successfully completed. The project, with a total value of $55 million, will enable BP Amoco to inject water to maximize recovery of oil from the reservoir by maintaining the field pressure. The water injection system installation will also enable extension of the plateau production period. The Chirag water injection system is designed to inject up to 220,000 barrels per day when in full operation, with an operating pressure of 297 bar. The start-up of water injection into the reservoir is scheduled for the end of May. By the end of this year, the water will be injecting into four wells, with additional wells to be added in the future as needed.

Chirag Future Development
In April, BP Amoco shareholders approved the Chirag Future Development (CFD) project, which is a significant infill development. Through the application of Extended Reach Drilling (ERD) technology, the project will increase Chirag recoverable reserves by 330mmbbls. As a result of expansion and debottlenecking of the existing oil and gas facilities on Chirag and Western Export Route facilities, as well as drilling of ERD wells, daily oil production will be increased to 130mbd by the end of 2001. The project is currently awaiting approval by the Steering Committee.

Progress on MEP
Good progress has recently been achieved in the Main Export Pipeline (MEP) negotiations. Discussions on the Host Government Agreements (HGAs) were finalized with Georgia on April 28 in Washington and with Azerbaijan in Istanbul on May 9. In addition a Protocol was signed in Istanbul on May 9 by representatives of the governments of Azerbaijan, Turkey and Georgia. The Protocol is the legal instrument to incorporate all of the finalized documents into the full set of Baku-Tbilisi-Jeyhan agreements signed in Istanbul on November 18, 1999. The agreements are now ready to be submitted to the parliaments of Azerbaijan, Turkey and Georgia for ratification. Once the agreements are enacted into law by the host governments, a Sponsor Group of interested companies will be formed to commence engineering for the Baku-Tbilisi-Jeyhan Main Export Pipeline project.



Above: Azerbaijan Red Crescent Society distributing AIOC donations to the victims of the recent landslide.

Relief to Landslide Victims
The Azerbaijan International Operating Company (AIOC) gave its support to the Red Crescent Society of Azerbaijan to help it bring relief to the families displaced by the landslide that happened in Baku's Sabayil district in early March. Following the landslide, which destroyed a number of homes and damaged road and communications links, AIOC approached the Red Crescent Society to ask how it could best support the humanitarian relief effort. On April 5, the consortium handed over a donation to the Society to help it meet the temporary needs of the most vulnerable displaced people. The donation was used to purchase household appliances and food items to support 150 affected families. The distribution of AIOC's aid packages was held on April 26 in a ceremony attended by representatives of two shareholder companies, BP Amoco and Statoil, the International Federation of Red Cross and Red Crescent Societies and Azerbaijan's Red Crescent Society.

Above: BP Amoco's contribution to the development of art and culture in Azerbaijan recognized by Humay Prize 2000.

Children's Books on Oil
BP Amoco in Azerbaijan recently provided the Azeri and Russian translations of a series of books for schoolchildren published by BP Amoco's Educational Service. The series, which includes "Oil and the Environment", "Oil Refining and Oil Products", "People Who Use Oil and the Service Station", "What is Crude and How Do We Find It?", "Producing Oil and Oil Transportation", "Chemicals from Oil and Plastics" and "Oil Exploration and Production", is aimed at providing school-aged children with basic knowledge on the application of oil and oil products to our everyday lives, the physical and chemical properties of oil and general information about the oil production and exploration business.

In April the company held a ceremony at the Young Scientists' School, which operates within the BP Amoco-founded Oil and Gas Exploration and Production Advanced Technology Center in Azerbaijan's Oil Academy. BP Amoco presented the richly-illustrated materials, designed to meet the demands of both elementary and high school levels. The School, supervised by academician Azad Mirzajanzade, is expected to be the main organization to popularize and further distribute the books among children's educational institutions. Educational materials published for the first time in Azerbaijan also include a program and a teaching guide for outdoor activities.

Eastern Stars Charity Concert
Children's ensemble "The Eastern Stars" gave a charity concert in the National Opera and Ballet Theater in mid-April. The concert, whose main sponsor was BP Amoco, featured popular pieces of national and international music, songs and dances. Funds raised from the concert will go to improve the lives of the most needy and vulnerable groups of children. Also, most of those in the concert hall were children from orphanages and various children's rehabilitation institutions.

Land Art Show
BP Amoco recently staged "Spring-2000" Art Show in the Azerbaijan International School as part of its Land Art Project. Since the beginning of the project two years ago, the company has sponsored production of the Land Art catalog, three exhibitions and this year's calendar, featuring the works of a group of young Azerbaijani artists who excel in Land Art. BP Amoco Community Affairs experts who launched the project in collaboration with the group of artists believe that the Land Art project "attracts people's attention to environmental issues through art and strengthens the message that nature should be preserved."

In recognition of its contribution to Azerbaijan's culture, BP Amoco recently received the Humay award for the fourth time in the past seven years. This annual award, presented by the Bakili (Bakuian) cultural society, marked the company's ongoing support for the Land Art Project. The group of Land Art artists that BP Amoco works with in this project were also awarded the Humay prize this year in the nomination of the best art project by young artists.



Above: BP Amoco recently sponsored a concert to commemorate the memory of outstanding jazzman Rafig Babayev, who was killed in a terrorist bomb explosion in March 1994.

Jazz Concert
In April, BP Amoco sponsored a jazz concert to commemorate Azerbaijan's renowned jazz musician Rafig Babayev, who was killed in a terrorist bomb explosion in Baku's Metro in March 1994.

Rafig Babayev was not only an outstanding composer and leader of the jazz band "Jangi" - he was also one of those who established Baku as a center of traditional jazz in the former Soviet Union. He discovered and helped develop the talents of many Baku jazz musicians, some of whom played in the BP Amoco-hosted concert. The concert also featured famous Russian musicians who had specifically traveled from Moscow to honor the outstanding Azerbaijani musician's unique contribution to the development of jazz in the entire former Soviet region.



Above: The wonders of Earth Day. BP Amoco sponsored educational projects to make youth more aware of their own responsibility in taking care of the environment.

Earth Day
From April 22 to 27, BP Amoco sponsored an environmental awareness week in Baku schools to mark International Earth Day. The company recognizes that children's awareness of, and interest in, ecological issues is of crucial importance for the world's future. Ecological education is a major part of the company's programs for schools and other educational institutions.

The Earth Day Project in Azerbaijan, developed by the local children's ecological educational NGO Gulum, included a range of programs, study sessions and other kinds of activities in schools of Baku, including the Ecological Lyceum and in BP Amoco's facilities, in the Institute of Microbiology and the State Ecology Committee, as well as at sites on the Caspian Sea coast and on the Jeyranbatan, Masazir and Duzlu Gol lakes.

Programs and activities were designed specifically for children of each age group. Each activity used the "learning by discovery approach" and was based on topics like: Wonderful Water, Understanding Nature through Play, Detectives on the Pollution Trail, I Can Do It, About You, Earth.

The project featured a range of prizes and awards that included: Best Drawing, Best Computer Drawing, Best Composition (poem, story or ecological essay) and Most Creative Teacher. All participants were presented with BP Amoco certificates, souvenirs and a copy of the book "Nature's Promise for Children."


From Azerbaijan International (8.2) Summer 2000.
© Azerbaijan International 2000. All rights reserved.

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